CAP: Romania to require leveling of direct payments for new member states

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Romania will require a quick leveling of the direct payments for the new states with those of the older EU members, within debates on the reform of the Common Agricultural Policy (CAP), according to data supplied by the Ministry of Agriculture and Rural Development (MADR).
Romania’s move is backed by another seven member states, namely Hungary, Bulgaria, the Czech Republic, Poland, Slovakia, Lithuania and Latvia.
 
According to the MADR, Romania will propose the acceleration of the top-up (supplementing of direct payments from the state budget), as the subsidies have already been set for 2007-2013.
Romania has also proposed the European Commission to extend, after 2009, the possibility to use the funds from the rural development for direct payment.
 
Also, debates within the CAP reform are expected from both the new EU member states – Romania and Bulgaria – and the old member states, as regards the list of conditions the farmers have to meet and the list of good agricultural and environmental conditions (Good Agricultural and Environmental Conditions – GAEC) that are to be implemented, by choice, by the member states.
 
The good agricultural and environmental conditions compose a set of conditions that have to be observed by farmers in order to maintain the quality of the farmland and avoid their abandoning. There is a total of 11 GAECs.
Another sensitive point within the debates is the mechanisms related to the intervention on the market.
According to the MADR, many member states cold agree to give up the intervention mechanisms because of the current situation as regards the high price of the agricultural products.
 
The Commission proposes the introduction of auctions for the wheat for bead, while as regards the fodder cereals the same pattern as in the case of corn should be applied, (decrease of the quantitative ceiling at zero.)
In spite of the fact that the cereal production in Romania has been smaller over the past years because of unfavorable weather conditions, (excessive draught, flooding), Romania continues to be an important cereal producer. Also, the maintaining of the intervention mechanisms on the cereal market, for wheat in particular is needed to avoid imbalances that might emerge.
 
As an important cereal importer, Romania will request the maintaining of the intervention on the cereal market.
The Commission has proposed the simplifying and harmonization of the current recommendations as regards the public intervention, by expanding a system of auctions (by using mechanisms similar to the stock exchange ones), so that this should be “a safety net” for farmers.
 
The European Commission proposes the elimination of subsidies for the private storage of cheeses with a long term of maturing and storage, the elimination of the stock of butter used to prepare pastry and ice cream, as well as for direct consumption.
Also proposed was that subsidies for the private storage of butter, for the powder milk used to feed animals and for the production of casein should be optional, leaving the Commission to decide whether it should or should not be implemented.
 
According to the MADR, Romania believes that it does not have to entirely give up the intervention until new efficient instruments for the market stabilization by controlling the offer, would be found.
As regards the elimination of subsidies for the private storage of cheeses with a long-term maturing and storage, Romania wished that these should not be completely eliminated, but applied optionally.
Also, article 68 of the proposal of Regulation as regards the direct support diagram for farmers stipulates a redistribution of funds from one field to another, that is why solutions need to be found to support the priority sectors, as the available amounts are smaller.
 
According to the MADR, another issue is related to modulation, as the Commission will not give it up, and the only expected compromise is a cut in percents. The modulation is a budget transfer/relocation manner of some amounts from Pillar I to Pillar II. The commission proposes a progressive increase in the modulation. The modulation does not apply to the beneficiaries of direct payments worth up to 5,0000 euros. The EU 15 have compulsory implemented the modulation since 2005.
 
The Commission’s proposal is that any farmer, who receives an amount bigger than 5,000 euros for a reference period or according to a level established by each member state within the single payment system, should allot certain percents to rural development activities. For 2009, the cuts had in view by the Commission in this respect vary between 2% for the farms that receive up to 99,999 euro per year, reach up to 11% for farms that receive up to 300,000 euro per year and even 17% in 2012.
 
As regards the risk management, Romania’s proposal to create a common fund has not been accepted by the Commission and is lacking support in many member states, which is why, according to the MADR, this goal might not be reached.
The evolution of the economic and environmental conditions introduces two types of risk for farmers, namely, market risks, generated by the evolution of prices and production risks caused by the weather and sanitary conditions.
 
The rural development policy is aimed to be one of the possibilities to approach current and future challenges that CAP is confronted with, such as weather changes, risk management, bioenergy, water management and biodiversity.
The member states can use up to 10% of the national ceiling in order to grant specific support forms, (support for the risk management, insuring the crops and compensating losses emerged after outbreaks of plant and animal disease).The new regulation allows the co-financing of the premiums for insurance against natural calamities, from the funds allotted to farmers through Axes 1.
 
The Commission strongly supports the management of the weather challenges, by exclusively using funds from Pillar II, which involves the implementation of some measures of the National Plans for Rural Development of the member states. In this respect, the Commission supports the modulation’s implementation.Romania believes that the introduction of a joint risk management mechanism is opportune to such a goal. Also, Romania supports the idea that such instruments should be financed at a European level from savings made under Pillar I, without affecting the direct payment to farmers.
 
French Agriculture Minister Michel Barnier, whose country ensures the half-year EU presidency, voiced hope to be able to get, in November, the approval of the 27 to adopt the Common Agricultural Policy (CAP) so as this December should also be obtained the approval of the Council of Ministers from the EU member countries.
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